The National Association of Women Lawyers and The NAWL ...

[Pages:25]The National Association of Women Lawyers? and The NAWL Foundation?

REPORT OF THE THIRD ANNUAL NATIONAL SURVEY ON RETENTION AND PROMOTION OF WOMEN IN LAW FIRMS

NOVEMBER 2008

Copyright 2008. All rights reserved. For additional information, call (312) 988-6186 or e-mail nawl@.

REPORT OF THE 2008 NAWL SURVEY ON THE STATUS OF WOMEN IN LAW FIRMS1

The National Association of Women Lawyers?(NAWL?) and the NAWL Foundation? are pleased to report the results of the third annual National Survey on the Status of Women in Law Firms ("Survey").

The Survey program began in 2006 in recognition of the gap in objective statistics regarding the advancement of women lawyers into the highest levels of private practice. NAWL's Survey is the only national study that annually tracks the professional progress of women in the nation's 200 largest law firms2, by providing a comparative view of the careers and compensation of men and women lawyers at all levels of private practice, including senior roles as equity partners and law firm leaders, and data about the factors that influence career progression. By compiling annual objective data, the Survey aims to provide (a) an empirical picture of how women forge long-term careers in firms and what progress is being made in reaching the highest positions in firms; (b) benchmarking statistics for firms to use in measuring their own progress; and (c) over a multi-year period, longitudinal data for cause and effect analyses of the factors that enhance or impede the progress of women in firms. Several state and local bar associations have used the Survey to begin their own dialogues about the progress of women in particular regions. We would be pleased to work with other organizations to extend the Survey into local and regional areas.

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Snapshot of the 2008 Survey Results

? In spite of more than two decades in which women have graduated from law

schools and started careers in private practice at about the same rate as men,

women continue to be markedly underrepresented in the leadership ranks of

firms. Women lawyers account for fewer than 16% of equity partners, those

lawyers who hold an ownership interest in their firms and occupy the most

prestigious, powerful and best-paid positions. The average firm's highest

governing committee counts women as only 15% of its members ? and 15% of

the nation's largest firms have no women at all on their governing

committees. Only about 6% of law firm managing partners are women.

? There is evidence that more recent women graduates are being promoted to

equity partner at a somewhat greater rate. Women constitute fewer than 10%

of equity partners who graduated from law school before 1982. Of those

equity partners graduating from 1982 through 1997, women comprise roughly

19% of equity partners. And, for those relatively few equity partners who

graduated in 1998 or later, women constitute 24% of the total. These

numbers show, however, that even in the best of circumstances, women are

promoted to equity partner only about half as often as men.

?

Women of color are hired as associates in large firms in roughly the same

proportion that they graduate from law school. But women of color are much

less likely to be in partnership positions than white lawyers of either gender or

men of color. In the average firm, women of color account for about 11% of

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associates but only 3% of non-equity partners and only about 1.4 % of equity partners. Thus, in the average firm, the percentage of women of color at the equity level is a small fraction -- 1/8 -- of the number of associates who are women of color. Clearly the combination of being female and a lawyer of color presents additional challenges within law firms. ? The Survey has captured data on a newly identified category of law firm, the "mixed-tier" firm, which has a different partner compensation structure than the traditional one-tier or two-tier partnership. In the traditional structure, an equity partner is both required to invest in the firm and compensated on the basis of his or her ownership share. In the mixed-tier firm, in contrast, all "equity" partners are required to contribute capital to the firm but some of them are paid as if they were income partners, receiving fixed compensation and not sharing in firm profits or losses. This is not an equity structure that has been reported very often although our data show that about 15% of the nation's largest firms are mixed-tier firms. The preliminary data also indicate that mixed-tier firms are less likely to retain and advance women lawyers to partnership than either one-tier or two-tier firms. ? At every stage of practice, men out-earn women lawyers, a finding that is consistent with NAWL'S previous Surveys and data from other sources.3 At the level of equity partner, the income difference is greatest. Male equity partners earn on average over $87,000 a year more than female equity partners. In 99% of large firms, the most highly compensated partner is a man.

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?

The market for lateral partners impacts promotion to equity partner. For both

male and female lawyers, moving is likely to be a better strategy than staying

in the lawyer's original firm. Laterals account for roughly two-thirds of the

women and three-quarters of the men who were newly promoted to equity

partnership. A startling 31% of new equity partners are recent laterals,

suggesting that they were specifically recruited for or negotiated a move for

equity positions. It also appears that males are recruited more often for

equity partnership than females. Firm structure impacts the extent to which

home-grown lawyers or lateral hires are promoted to equity partner. One-tier

firms are almost equally likely to promote women from within or import

female talent, while two-tier and mixed-tier firms are much more likely to

import equity level women lawyers than to advance their home-grown

women lawyers.

?

Today it is the rare large firm that does not make some effort to enhance

career prospects for its women lawyers. Nearly 97% of law firms have

implemented women's initiatives, which provide a combination of programs

on professional development, networking, mentoring and/or business

development. Indeed, over 90% of firms include business development

activities as part of their women's initiatives, perhaps in recognition that

women have not historically developed as much business as their male peers

and that women frequently seek help in navigating the cultural and social

issues associated with the development of business relationships. Given that

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women's initiatives and formal programs for business development skills are relatively new activities in firms, it is too early to say whether these programs will enhance the level of business development by women lawyers. We now turn to more detailed analyses.

How Well Do Women Lawyers Progress in Law Firms? Women start out in about equal numbers to men when they enter law firms as first

year associates. But the fall-off of women lawyers begins early in their careers and gains momentum at each level of seniority, which ultimately shrinks the partnership pool of women lawyers. Women constitute 48% of first- and second-year associates, a percentage that approximates the law school population (especially considering the pool of law schools from which the nation's largest firms recruit first-year associates). There is a small fall-off at higher levels of the associate ranks, with women constituting 45% of mid-level associates and 44% of 7th-year associates. The associate statistics have not changed substantially for over 20 years, demonstrating that for over two decades there has been a steady pipeline of women lawyers entering large firms at the same rate as men.

Beyond the associate level, however, the number of women shrinks at each level of the firm. Women constitute 34% of of-counsels, 27% of non-equity partners, and fewer than 16% of equity partners. To put an image on what these statistics mean, if a client were to enter a conference room of 50 first-year associates in the average large firm, about 23 (almost half) of the associates would be women. In contrast, if that same client were to enter a conference room of 50 equity partners in the average large firm, only eight equity

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partners would be women. Recent graduates have had a somewhat greater chance of becoming equity partners than those who graduated more than 25 years ago. Nevertheless, considering that women have been entering firms in roughly equal numbers with men for more than two decades, these percentages are much smaller than expected.

With respect to of-counsel lawyers, in the average firm, there is a greater percentage of men than women and the majority of women in of-counsel positions have graduated since 1982. In contrast, the highest percentage of men in the of-counsel position are those who graduated before 1982. It appears that men are more likely to occupy the of-counsel position as they approach retirement years. The of-counsel role was traditionally reserved for senior lawyers transitioning to retirement, but in recent years has increasingly been used by firms as an intermediate position for lawyers who are not promoted to partner but have many similar practice skills as partners. Anecdotally, the of-counsel title has also been given to partners who were "de-equitized" by their firms but who, for various reasons, continued to be employed by the firm.

In measuring the advancement of women in firms, in the first instance we focus on equity partnership because other than a law firm leadership role, there is no more important criterion of professional success than being an owner of a firm. Equity partners are the highest paid lawyers and enjoy the highest status and influence within a firm. Given the current fragile state of the U.S. economy, however, we are concerned about the near-term prospects for improving the number of women equity partners. As of May 2008, legal employment was down from the preceding year and since then, there have been highly publicized downsizings and even dissolutions among AmLaw 200 firms.4 Moreover, women

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leave firms at a higher rate than men during the years preceding equity partnership decisions. Since the data show that women start out at slightly less than half of incoming associates and taper off over time, even an equivalent departure rate may translate into a substantial decline in the percentage of women lawyers practicing in the large firm environment. If senior women lawyers are not visible as colleagues, role models, and mentors, their contributions may be overlooked or devalued, and firms may come to accept as a given that women will not advance into senior positions in substantial numbers.

The year-over-year failure to move the needle, in spite of near-universal commitment to remedies such as women's initiatives and part-time work policies, raises the concern that firms have not yet implemented effective strategies and practices to bring about needed change. Certainly there are beneficial actions to take. In this regard, NAWL has recently issued a report outlining its recommended actions for law firms to take for advancing women lawyers. See Report of the National Association of Women Lawyers National Leadership Summit, "Actions for Advancing Women into Law Firm Leadership," (2008) (hereinafter "NAWL Summit Report").5

Race/Ethnic Background of Lawyers and Position in Firm The 2008 NAWL Survey asked firms to report for the first time the race/ethnic

background of their equity partners, non-equity partners, of counsels, and associates, both male and female.6 While race/ethnicity data are available from other sources for lower levels of lawyers within firms7, we were especially interested in data beyond the level of first-tier partner. A few trends are worth noting. The data suggest that women of color are

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